Debt Settlement Infomercial Producers Settle Colorado Charges

You're driving along, listening to the radio, and a program comes on featuring a guest who says it's easy to walk about from your debts. All you need is a clever debt-settlement service.

Intrigued, you write down the toll-free number at the next traffic light and give the company a call. The experience, however, doesn't quite work out as advertised. In fact, you end up in worse shape than before.

How could that radio station broadcast a program that was so misleading? That's what Colorado Attorney General John Suthers wanted to know. The program about debt settlement, it turns out, was not produced by the station that aired it but by an infomercial producer, who bought time on the station and aired it.

Suthers filed suit last year against Real Talk Network and its principals, charging them with deceptive marketing. He's now reached a settlement with the company, requiring it to pay $226,414 – with most of that going to consumer restitution.

The settlement resolves charges that the company’s infomercials falsely promised, through deceptive infomercials and seminars, that they could help consumers get out of debt and pay off their mortgages in less than 10 years.

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Real Talk Network isn't the first debt relief company, posing as a broadcaster, to run afoul of consumer authorities. Earlier this year three companies and their owner, who allegedly falsely claimed they could help consumers quickly eliminate their credit card debts and stop calls from debt collectors, were banned from the debt relief business under a settlement with the Federal Trade Commission (FTC).

According to the FTC’s complaint, The Hermosa Group and Financial Future Network deceptively advertised debt relief services, in English and Spanish radio and television ads, claiming that consumers could pay thousands less than what they owe on credit cards.

The defendants themselves did not provide any debt relief services. Instead, the advertising was meant only to generate sales leads -- the names and phone numbers of consumers who called the defendants’ toll-free number -- which the defendants sold to debt relief providers or other sales lead generators.